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Employees offer concessions to save jobs

Former mayors urge council to give residents choice before outsourcing services

The union representing 13 Atherton employees who were given pink slips May 31 will meet with town representatives on June 9 to try to save its members' jobs by offering about 12 percent in compensation concessions.

The employees of the building and public works departments, some of whom have worked for the town for decades, are in line to lose their jobs on July 1, and the town plans to outsource those departments.

Although Interim City Manager John Danielson had made clear in early May that job and service cuts were almost certain as he tried to erase a projected budget shortfall in fiscal year 2011-12, the scale of the planned cuts took many staff members and the community by surprise.

Two former mayors, Malcolm Dudley and Jim Janz, wrote an open letter urging the City Council to survey the community on its willingness to pay more in parcel taxes before taking the drastic measures planned by the town.

Mr. Danielson told the Almanac that notices to employees were "intent to lay off," and that the town is taking seriously this week's talks with the union. But, he added, 12 percent in employee concessions "would amount to about $165,000 ... and I have an $856,000 shortfall" to address.

Because requests for proposals (RFPs) to provide services have only recently been issued, Mr. Danielson said he can't say how much outsourcing the building department and public works department -- which includes street and park maintenance -- will cost the town. But based on his past experience, he estimated that contract services would cost between 70 percent and 80 percent of what the town pays for services provided by in-house staff.

Cuts in services are likely to reduce town spending beyond employee costs, he said. And the town will look at cost savings in its largest division -- the police department -- as it reviews health and pension contributions for those employees, he said.

At a special May 9 meeting, the City Council gave Mr. Danielson the green light to do what he believes needs to be done to balance the budget. There have been no public meetings where specific options on which staff positions or public services might be eliminated were discussed.

Peter Finn of Teamsters Local 856, which represents the employees, said they are offering compensation concessions "to help the town deal with the budget challenges while maintaining services the citizens of Atherton expect."

Although a number of public agencies have, over the last few years, asked employee unions to reopen contract talks in an effort to gain money-saving concessions, Atherton did not do so, Mr. Finn said. "Is this really about money for the city manager, in terms of solving the budget problem, or is it philosophical, because he's (in favor of) outsourcing? That's an open question."

Parcel tax increase?

In their open letter, Mr. Dudley and Mr. Janz acknowledged that there may be some cost savings with outsourcing services, "but there are many offsetting disadvantages."

Mr. Dudley told the Almanac that he surveyed a number of cities that have outsourced some services, and learned that sometimes anticipated savings didn't materialize, or they were less than expected.

He noted that, after the 1978 passage of state Proposition 13, the town surveyed residents about whether they wanted to see their services reduced or to pay more in taxes; 85 percent responded that they would support higher taxes.

If the town raised the current annual parcel tax by $350, he said, it could deal with the budget shortfall. The current parcel tax is $750 per year.

"Just $30 a month (per household) solves the problem," Mr. Dudley said, and would allow the town to avoid "this wholesale firing of people."

"I just cannot believe we can be this insensitive (in a matter) this important," he said. "I think of our employees as our family. ... How can we treat people in such a way? That never was a part of the character of this community."

Although he said that not all outsourcing is bad, having staff in house in many situations is better. In addition to the "institutional memory" current employees possess, "these are people who care about the town -- they care about us."

In a letter to City Council members, Diane Aiello, the wife of building inspector Joseph Aiello, pleaded with the council to "reconsider and not let my husband go from his position. ... If you let him go, our family will be devastated both financially and medically."

The couple and their three children live in Paradise, California, and during the workweek Mr. Aiello lives in "a small trailer, on the outskirts of Atherton in a not so nice neighborhood," Ms. Aiello wrote. The depressed economy and real estate market have prevented the family from moving, and "any kind of job is hard to come by" in the area, she said.

Self-sustaining?

Mr. Aiello, who has worked for the town for nearly three years, spoke to the council at its May 18 meeting, reflecting the uncertainty among the staff that had grown over the months of bleak budget discussions. He warned that outsourcing may in the end cost the town more, and noted that the building department, "when it's run correctly," is supposed to pay for itself with revenue generated by fees.

So if the department is self-sustaining, why is it being outsourced? Mr. Danielson said that during slow times, "building departments tend to lose money. In good times, they hope to break even or better."

Mr. Aiello said that, except for a "brief pause" in November 2008, the department has been extremely busy, and as a result, plan-check and building inspection fees "should have been covering costs."

In fiscal year 2009-10, the building department generated about $901,500 in revenue, but cost the town about $1.2 million, according to finance director Louise Ho.

In the current fiscal year, the department has brought in about $1.3 million as of May 31, she said. Projected costs through June 30 are about $1.5 million.

The department has had a reserve of more than $1 million since June 30, 2010, Ms. Ho said.

One explanation for costs exceeding revenue might be that the town arborist and code-enforcement services are attached to the building department, an unusual situation. Neither service is revenue-generating, unlike services typically provided by cities' building departments.

Comments

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Posted by Ed
a resident of Atherton: other
on Jun 7, 2011 at 12:27 pm

While I am not the least bit interested in giving the Town any more money in an increased parcel tax to continue to mismanage (way too many wasteful decisions already!!!)--I do support a more open debate about what the possible options for balancing the Town;s budget might be.
The "departmental reviews" which were ordered in February have never been made available to the public who paid for them, but should be, in advance of any changes.
The very tony Police Department should be offering to match any concessions offered by all the other departments.
Simply outsourcing just the APD's Dispatch unit to the Sheriff's Office, could save the rest of that department and all three of the other departments which are now at risk. I don't understand why we need the Canine Unit either (it never does anything) but apparently it is not terribly expensive to run and makes the officers feel safe.
There are plenty of options that should be on the table for open discussion.
To have started these cuts with the only profitable department (Building) and with no thought of trimming from the one that is the biggest drain on limited resources (APD), is exactly the kind of inefficient thinking that got us into this mess.

Posted by Bob
a resident of Atherton: other
on Jun 7, 2011 at 12:47 pm

The negotiation should simple, keep employees and get rid of the union. Let the managers manage based on budget and performace not senority. Same approach with APD or outsource them also.
If Mr. Dudley and Mr. Janz want to send in a check to cover the shortfall please remit immediately. Otherwise Atherton needs to spend based on what is available. With 11.9% unemployment in CA it should be easy to find lower cost replacements. The notion that Atherton has to spend to compete with the private sector is so yesterday. Atherton need to reduce to compete with the private section.

Another question to consider: How much money could we have been saving all along if we INsourced our Planning department instead of contracting it out?.
Lisa Coster Saunders has by now installed two of her own Mercedes driving underlings in the back of the trailers. Are all three of them billing us $100.00 an hour for having negotiated Atherton's fabulous garbage contract on our behalf?

Also--the only reason we are paying for a Code Enforcement Officer out of the Building Department budget is that the Police Department has long refused to enforce any of the Town's ordinances, so somebody had to be hired to do their job for them.
Just plain silly

Posted by Neither plan works
a resident of Atherton: West of Alameda
on Jun 7, 2011 at 3:35 pm

Janz and Dudley think that Atherton can continue to avoid reckoning with unsustainable employment contracts by passing more and more costs onto the backs of residents.

This won't work, and Danielson has realized this. The day of reckoning cannot continue to be postponed.

Most ironically, in proclaiming he won't postpone the day of reckoning, Danielson is deceiving himself and everyone else by avoiding dealing with the unsustainable police department. This takes the most costs and needs to get dealt with, and dealt with now.

Bob is right. Janz and Dudley should either write the check or stop flapping their mouths.

Danielson needs to deal with the real fiscal problem. Here's a hint: it's not Mr. Aiello or Mr. Anderson.

Bob--Your thinking spot on. I have talked to a few of the at risk employees who would like to stay but ditch the union representation as you have suggested.
The Police should be made to feel the same pressure and more.

before Pogo's always appreciated enthusiasm takes us too far off topic here--does anybody know about the time and location of Thursdays meeting--will the press or pubic be allowed?
Will the APD be filming as they have of late?

Posted by Menlo Voter
a resident of Menlo Park: other
on Jun 7, 2011 at 7:31 pm

The easiest way and best way for Atherton to solve this problem is to get rid of APD. There is nothing they do, aside from picking up papers and watering lawns, that the sheriffs department can't do. The building and planning departments are actually harder to outsource than it would seem. There are things they do that are not typical building department functions and will not be dine by contract inspection companies. If the citizens of Atherton want their papers picked up and their lawns watered they would be better served to hire private security to do so. MUCH less expensive.

Marlin:
Hang on there--I thought that the Council had made a very BIG deal about Danialson being out of here in no longer than six months (june?)as part of the whole story they gave us about why the man would have no agenda for extending his stay... because It was finite...................Am I the only one who remembers them telling us this??
Also--back to the budget:
On last weeks other Atherton Outsourcing thread (130 comments), Peter Carpenter pointed out the savings and logic in consolidation of emergency preparedness services with the MP Fire District. This savings should be looked at for it's potential in helping to solve the budget problem---but separately-- Be honest--wouldn't everyone MUCH rather have the Fire District in command of any real disaster anyway? When I stopped to think about it, I had to admit to myself that I actually would not be comfortable in needing to depend on the APD to know how to handle anything more than traffic tickets and loud parties and awards ceremonies. Yes please! Let's CONSOLIDATE EMERGENCY SERVICES with MPFPD

Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jun 8, 2011 at 8:29 am

Facts are important - Danielson's contract is for 12 months.

There is no evidence that Danielson has or will benefit personally from the difficult decisions that he is making - except a well deserved thank you from concerned citizens.

THe council was briefed by Danielson before he proceeded and "At a special May 9 meeting, the City Council gave Mr. Danielson the green light to do what he believes needs to be done to balance the budget"

Peter-I can not cite any documentation for what may be my misconception about the intended length of Mr Danialson tenure and I will assume that you are more familiar with the actual terms of his contract than I am. On reflection my understanding may well have been based on statements made by the Mayor as quoted in the press or Council meetings which you are not always able to attend. I am positive that my own fears that Mr. Danialson might try to extend his stay indefinitely were repeatedly satisfied with assurances that this possibility had been anticipated and averted by the very specific and brief constraints built into his contract. I was sure somehow that 6 months was was the time frame presented in both open session and the press.

Dobbie said the council wants the search for a permanent manager to be thorough, but that he hopes it can be concluded within six months.
A key to his appointment, Mr. Dobbie said, is that Mr. Danielson didn't want the permanent manager's position. "That's what we insisted on," he said, explaining that the council didn't want others interested in the permanent position to be reluctant to apply because a fellow applicant had his foot in the door.
Mayor Jim Dobbie and Councilwoman Kathy McKeithen were appointed as a subcommittee to negotiate a contract with Mr. Danielson. Mayor Dobbie said the council wants the search for a permanent manager to be thorough, but that he hopes it can be concluded within six months.

Posted by peter carpenter
a resident of Atherton: Lindenwood
on Jun 8, 2011 at 11:36 ampeter carpenter is a registered user.

The contract, dated Dec 22, 2011, specifies 12 months.

For my tax money, I hope he stays as long as he continues to cut expenses and reduce the deficit. But it is clear from the contract and Danileson's statements that he has no interest in the permanent position.

Just think what a gift it would be to a the new permanent Town Manager to start with a truly balanced budget and no scars from having to do layoffs and outsourcing.

Posted by peter carpenter
a resident of Atherton: Lindenwood
on Jun 8, 2011 at 3:36 pmpeter carpenter is a registered user.

The Town Manager has the authority to lay off the police department but a contract to outsource the PD would be large enough as to require the approval of the Town Council.

Town Ordinance:
2.12.070 Powers and duties of Town Manager

The city manager shall be the administrative head of the government of the town under the direction and control of the city council, except as otherwise provided in this chapter. He shall be responsible for the efficient administration of all the affairs of the town which are under his control. In addition to his general powers as administrative head, and not as a limitation thereon, it shall be his duty and he shall have the powers set forth in the following subsections:

A. To see that all laws and ordinances of the town are duly enforced and that all franchises, permits and privileges granted by the town are faithfully observed;

B. To control, order and give directions to all heads of departments, except the city attorney, and to subordinate officers and employees of the town through their department head, and consolidate or combine offices, positions, departments or units under his direction;

C. To appoint, remove and demote any and all officers and employees of the town except the mayor, councilmen, chairman and members of the planning commission and the city attorney;

Posted by steve
a resident of Menlo Park: Downtown
on Jun 8, 2011 at 3:37 pm

I think the police department is next. its just a matter of time. The APD has been a joke for a long time. Now it is time to outsource the police and get better service. But i certainly hope it is not the Menlo Park Police that takes over. The drunk drivers in Atherton will not stand a chance.

Posted by Colleen
a resident of Atherton: West Atherton
on Jun 8, 2011 at 5:27 pm

Didn't a large number of our last tax increase go to paying legal & town employees who sued us? What are all the lawsuits concerning. Isn't it employee issues? What is the total paid out to employees including legal & how much are we being sued for now? Just asking. Will the next tax increase go to paying legal like the last one?

Peter: So reading carefully--the City Manager could technically come to grips with the APD anytime prior to his departure in the next six months, even if the Council members were not in majority support for such action, since all they can do is to remove him after the fact and could therefore deflect any fall out from this away from themselves. I guess this could still result in a great letter of recommendation.
I still find it odd that the the entire Town has to be dismantled in order to even approach a too firmly entrenched Police department but things may have been worse than even the biggest skeptics have imagined so far.
This is all supposedly about the budget and while I'm sure money is in fact a prominent feature---I am beginning to wonder if the explanation for so much nuanced confusion, is not going to turnout to be a much broader scandal that has not yet surfaced.
Something like that--otherwise I am still just not getting it.

Perhaps Mr. Danielson might consider reinstating the Atherton 13 at their current salaries if they would agree to collectively just give up their sick days. That option could also be extended to others that work for the town and who also might be in danger of losing their jobs. After all, that was the "huge personal sacrifice" we are supposed to believe demonstrated true "leadership" in these tough times by the Menlo Park fire chief. It would be a win-win for all sides.

Anyone that believes the APD will be outsourced is probably still convinced there was a second shooter on the grassy knoll. While cutbacks and furloughs may happen, one only has to look at the endorsements of council members Dobbie, Lewis and Carlson and see the support by the many 20+ year residents like Malcolm Dudley. Longtime residents can probably overlook outsourcing of public works or even the fire department but the police department has never been negotiable regardless of mistakes it might make or if it means having to cough up an extra $30 bucks a month.

Peter: You need to look at the council agenda for next week which has already been posted on line.
Now to clarify--I am the one who is confused. I am hoping very hard that you are not confused and that your confidence in the City Manager and the decisions being made about the Town's future are very well founded by closer contact and interaction with leadership figures, better access and facility with documents and a lot more experience than I have in these matters.
My previous post was an attempt to rectify in my mind various agenda items like "approving more anonymous donations to the APD" and "moving ahead with the "New 17 million dollar Town Center Administrative Complex" , with anything I might recognize as either reform or efficiency.

Posted by What are you talking about?
a resident of Atherton: Lindenwood
on Jun 8, 2011 at 10:22 pm

Thomas, Sharon Heights, how would giving up sick days solve the deficit problem in Atherton? I thought the goal was to balance the budget, not just make employees show a sign of sacrifice. What you are proposing doesn't make sense to me, but perhaps you can explain. Regarding the police department, yes, there have been a number of vocal and longtime residents who support it, but again I don't follow how that translates into everybody needs to pay extra for it because everybody will support having our own department at any cost. That's a leap of logic and while it may be true, it is certainly not necessarily true. Again, what is your data for this?

Posted by Marlin
a resident of Atherton: West Atherton
on Jun 8, 2011 at 11:00 pm

[PORTION DELETED.]

You are also dead wrong about what Danielson can and cannot do. Danielson would require Council approval to outsource any department, not just police. Look at the ordinance you cited yourself.

As far as your encouragement to be civil. The time for civility has passed. The well being of 13 people who have served Atherton economically and honorably is on the line.

The bid is rigged. A short notice, a mandatory pre-bid conference and an impossibly quick turnaround time are clear signs. You with all of your so called experience should see it for what it is. It is a sham.

To:
What Are You Talking About: Suggest you scroll up to the "search" link on this website and enter "Fire Chief's New Contract Reflects Economic Climate" My posts make more sense to those that follow the blogs on this forum on a consistent basis but I would be happy to respond back to your questions after you have read the article and the subsequent posts.

Mr. Ed: "Peter--Now to clarify, I am the one who is confused. I am hoping very hard that you are not confused..."

The Town Square is a forum to express opinions...not rely on "facts" from another poster. I have never had a problem in getting a honest answer or response back (either by e-mail or telephone) to questions I have posed to any council member or even The Almanac if I identified myself. It's hard to believe in this day and age that there are people that believe there is some larger conspiracy going on in the press or with their elected officials and they choose to rely on posts from this forum to answer their questions.

Got that everybody
People living in Sharon Heights have a better line through to Atherton council members than a lot of Atherton residents do. I have been trying to make this exact point for years--thank you Thomas for proving my suspicions were not paranoia.
What it is that you are doing in spending so much time on the Atherton threads of this Forum if you find the discussion so unreliable, and when you could be using your hotline?
Peter may owe me a lunch or two but his allegiance and intentions are always completely in earnest. Yours are not, except to loom around here on the wrong blog, beefing about the Fire Chief and trying to irritate Peter.

Got it Mr. Ed except I'm also paying taxes on an overpaid Menlo Park fire chief thanks to Mr. Carpenter. While you continue to deride Mr. Danielson in your posts on a Menlo Park website, he already has reduced your town's $900K deficit by $165K. We had no such luck with the Menlo Park Fire Protection District getting a 12% reduction in salary with the fire chief. [Portion deleted. Please stick to the topic.]

Posted by What are you talking about?
a resident of Atherton: Lindenwood
on Jun 9, 2011 at 8:59 am

Thomas, I have read the articles and understand that foregoing sick days relieves liabilities on the Atherton balance sheet but clearly does not affect the profit/loss for a year, which is based on the yearly wages. With that clarification, can you answer either of my two questions:

1. How would the sick day forgiveness address profit/loss issues?

2. How are you so sure – in a situation in which you may agree that a very, very small minority of Atherton residents speak out at or even attend meetings, or post on these blogs – that almost all Atherton residents support having our own police department no matter what the cost? I may agree with you that among the residents who actually attend meetings, this could be true.

Posted by POGO
a resident of Woodside: other
on Jun 9, 2011 at 9:34 am

d -

Good questions!

Do you think that we "suffer" in Woodside with coverage from the San Mateo County Sheriff's Department? Like most Atherton residents, we know our deputies on a first name basis and they couldn't treat us better! I will admit that they don't, however, water our lawns or pick up our newspapers when we're on vacation. Of course, I wouldn't have the nerve to ever ask a law enforcement official to do something that neighbors do for neighbors.

I can tell you this. When my daughter went missing one day, within 10 minutes, there 6 Sheriffs cars at my home and they had blocked off the major intersections leading into and out of my neighborhood. Within 30 minutes, they had established a missing persons team at our home complete with tracking dogs. The ability of the Sheriff's Department to instantly "flood" an area with deputies and mobile units is an incredible resource.

I'm not sure that you will ever need those services and I hope you don't. But remember that no local police department has the scope of detective, crime lab, bomb squad, search and rescue or emergency services capability that the Sheriff's Department has.

And, as has been pointed out by Mr. Carpenter, Woodside get all of this for about one-third the cost (per capita) as Atherton. Of course, we don't have to pay for all the drama, either!

Let me clarify. When I asked about vacation checks, among other traditional services, I did not asked paper pick up, but rather police patroling and visually inspecting the property from the car when one is away. The value of this service is huge as a preventive measure deterring the crime.

Another related question would be, if the APD is outsourced, would it still have the office in the town? I believe it is important to have the office here, but taking it out might be counted as huge cost saving.

While I have never asked police for vacation paper pick up, i can understand why police would do it anyway, if I had papers, again simply as removing a signal telling thieves that owners are out. That said, I would urge owners to save that particular police cost by having online subscriptions etc... it's much greener anyway.

Other people can address some of these Questions much better than I can--but I have asked similar ones in the past and been assured that we can negotiate for whatever kind of service that we want -- Having a substation or two--Atherton logo magnetic decals stuck on to identify our patrol cars--nothing would need to feel or be any different. When you think of all the vehicles and fancy equipment the Town has bought the APD, we have a lot that we already own to negotiate with for use here.

Posted by POGO
a resident of Woodside: other
on Jun 9, 2011 at 11:45 am

d -

I said that you were asking good questions.

In Woodside, we DO have an office for our Sheriff's deputies to hang out. But they are, for the most part, patrolling. And yes, they will put your house on a watch list if you're on vacation.

But I have to disagree with you on the appropriateness of having a highly trained, armed, $100k law enforcement officer picking up your newspaper. As you said, it's really not very hard to put a vacation hold on your subscriptions. But I would suggest you simply ask a neighbor to do it. It serves three purposes: (i) you will meet your neighbor; (ii) it will alert them to watch your house and they are MUCH more tuned to activity in your home than an occasional drive-by from a policeman; and (iii) it will allow the officer time to do other things. As a bonus, your neighbor will occasionally ask you the same favor in return. We do it all the time.

Posted by POGO
a resident of Woodside: other
on Jun 9, 2011 at 11:46 am

d -

I forgot to add, that I'm sure the Sheriff's deputies would appreciate the use of a single desk in Atherton's Town Hall. They don't need anyone or anything else, not a clerk, a dispatcher, a detective or a Chief.

To: What Are You Talking About...you have made my point exactly. The concession of sick days does absolutely NOTHING towards helping to balance the budget but we are led to believe by the Menlo Park Fire District that this was a "huge personal sacrifice" by the fire chief. Because of this, I am facetiously suggesting the same solution as a panacea for other public servants that may be losing their jobs when in fact it's nothing but fuzzy math. Real concessions towards balancing town budgets involve salary reductions not agreeing to give up sick days.

As for police outsourcing, I put more faith in the two former mayors and longtime residents that certainly have a better understanding of the town and it's residents than anyone on this forum that claims outsourcing is not a popular option or even believing the "97% satisfaction" survey. Like everything else on this forum, it's an opinion and I don't think two well respected former mayors would suggest an additional tax unless they truly believed there would be wide support for the idea. If you look at last year's voter's guide posted by The Almanac and read the statements to The Almanac by three of the current council members, there is a consensus that it's not going to happen without first asking all the residents.

Thank you for pointing out which Council Members were selected by, and took money and endorsements from the Atherton Police Officer Association.
Only selected residents were even included in the dubious 97% satisfaction survey. "A 97% solution" to Atherton's budget problems and litigation costs would be to outsource the entire department, or to at least start dismantling divisions of it like dispatch to the county, or disaster preparedness to the Fire Protection District.
No one has been more clueless about what really goes on in Atherton than most of it's recent Council Members who get their info spoon fed to them from the APD with just a dash of fear sprinkled for color. If this is really where you get your info then then it becomes at least credible that you are not just some spin miester planted here on this thread.

Posted by Peter Carpenter
a resident of Atherton: Lindenwood
on Jun 9, 2011 at 3:41 pm

Forum readers are cautioned to not accept statements like "The concession of sick days does absolutely NOTHING towards helping to balance the budget " from individuals who are not only anonymous but who clearly have neither substantive business experience nor any experience in elected office.

Source credibility is crucial, particularly when dealing when comments by unknown individuals.

Joe Saino, formerly of the Shelby County Retirement Task Force states:
"It's a preemptive strike because they see the handwriting on the wall all over the country. The cut in sick days isn't enough". 01/14/11

Perhaps Mr. Carpenter can cite readers with his own independent article to substantiate his point of view. His old standby "anonymous poster" excuse is always rolled out as a last resort and wears thin.

This Statement provides guidance for the measurement of accrued compensated absences liabilities by state and local governmental entities, regardless of the reporting model or fund type used to report the transactions. Compensated absences are absences for which employees will be paid, such as vacation, sick leave, and sabbatical leave.

The standards in this Statement give consideration to the different characteristics of various types of compensated absences. For example, employees usually receive full compensation for vacation leave-either as paid time off or as compensation at termination or retirement. Thus, employees earn the right to be compensated for vacation leave based only on rendering past service. On the other hand, paid time off for earned sick leave is contingent on an illness-a specific event that is outside the control of the employer and employee. In some cases, however, employees may be compensated for a portion of their sick leave when they terminate or retire. In those cases, employees earn the right to be compensated for sick leave at termination based only on rendering past service.

Vacation leave and other compensated absences with similar characteristics should be accrued as a liability as the benefits are earned by the employees if the leave is attributable to past service and it is probable that the employer will compensate the employees for the benefits through paid time off or some other means, such as cash payments at termination or retirement.

Sick leave and other compensated absences with similar characteristics should be accrued as a liability as the benefits are earned by the employees but only to the extent it is probable that the employer will compensate the employees for the benefits through cash payments conditioned on the employees' termination or retirement ("termination payments"). Alternatively, the liability should be measured based on the sick leave and other compensated absences with similar characteristics accumulated at the balance sheet date by those employees who currently are eligible to receive termination payments as well as other employees who are expected to become eligible in the future to receive such payments. When the liability is calculated, these accumulations should be reduced to the maximum amount allowed as a termination payment.

This Statement requires the compensated absences liability generally to be measured using the pay or salary rates in effect at the balance sheet date. It also requires additional amounts to be accrued for certain salary-related payments associated with the payment of compensated absences, for example, the employer's share of social security and medicare taxes.

The provisions of this Statement are effective for financial statements for periods beginning after June 15, 1993. However, for governmental and similar trust funds, only the current portion of the liability should be reported in the funds; the remainder of the liability should be reported in the General Long-Term Debt Account Group (GLTDAG) and compensated absences expenditures should be recognized using a modified accrual basis of accounting. The provisions of this Statement are effective for recognizing governmental and similar trust fund expenditures using an accrual basis of accounting when GASB Statement No. 11, Measurement Focus and Basis of Accounting-Governmental Fund Operating Statements, becomes effective.

Posted by POGO
a resident of Woodside: other
on Jun 9, 2011 at 7:57 pm

Our governor just approved a dramatic increase in allowing prison guards to accrue essentially an unlimited amount of unused vacation and sick pay. Some say it was payback for the prison guards support of Governor Brown in the last election.

It is a huge deal with a huge, adverse impact on our state's finances. Some guards will retire and be paid $100,000 in unused vacation pay. Web Link

In the private world, we CAP unused vacation and sick days. Use it or lose it.